Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10477324 | Journal of International Economics | 2015 | 13 Pages |
Abstract
We derive a gravity equation in our model and show that administrative costs can be expressed as bilateral ad-valorem trade costs. We estimate the ad-valorem equivalent in Spanish shipment-level export data and find it to be large. A 50% reduction in per-shipment costs is equivalent to a 9 percentage point reduction in tariffs. Our model and estimates help explain why policy makers emphasize trade facilitation and why trade within customs unions is larger than trade within free trade areas.
Related Topics
Social Sciences and Humanities
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Economics and Econometrics
Authors
CecÃlia Hornok, Miklós Koren,